REPORT BY DAVIDE BERLONI
MONTENEGRO 2005
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AGRICULTURAL ROUND TABLE
Introduction
We would like to remind all those taking part in the Round Table that Councillor Bucciarelli, who took part in the inauguration of the Round Table and who worked on the initiatives carried out last year is no longer the Provincial Councillor for Agriculture. Following the April 2005 elections, and his good electoral results, he has become a Regional Councillor. He passes on his regards, and the former Councillor will attempt to give continuity to the initiatives of the Agricultural Round Table and in particular to any initiatives that are a continuation of the projects organised last year.
We feel it is appropriate to give a brief summary of the initiatives carried out during the past year.
With regard to the most important initiative "COOPERATIVES: DEVELOPMENT STRATEGIES FOR THE BALKANS” we should mention that this was conducted with considerable success between 14-17 December 2004. The project involved two events, the first represented by a theoretical seminar on the CAP and the recent amendments contained in the Mid Term Review (MTR) and on the system of cooperatives in the Marche region. This was particularly appreciated, for the contributions and the corporate case studies that were presented. The second event involved targeted company visits, carefully organised and conducted, appreciated by the Balkan operators, and also for the high quality of the companies and products and for the presentations which were, in many cases, made directly by the business owners (please refer to attached report).
With regard to subsequent points of the report, the aim is to focus on critical points for the Balkan agricultural industry, with the aim of discussing possible solutions and possibly setting up actions, initiatives and cooperative activities shared by participants in the Round Table. We should mention that at this time, there is no financing for these actions which must therefore be located, also considering that the activities set up last year, within the context of the Round Table, were decided, organised and financed in conjunction with the Province of Ancona (not in attendance today as the new councillor for agriculture has not yet been appointed). Any projects which should receive greater attention and interest will thus be shared with the new Provincial Councillor for Agriculture, both as planning directions decided on today, and for possible financing.
It should be mentioned that certain initiatives (in particular points B) and D) were already proposed last year.
A) Cooperation in the agroindustrial sector: high quality products and strategies for the Balkans
Requirements for action:
The Balkan region has always represented an outlet and an important supply market for Italian SMEs, despite the wars that led to the disintegration of the former Yugoslavia and the economic impoverishment of countries in the region. Immediately after the war, reasonably strong relations were set up between the new local institutions in the Balkan states and Italian organisations, in which cooperatives play an important role. It should also be noted that in many cases, the relations based on solidarity transformed into partnerships between local areas, with a view to effective cooperation. The critical situations that the new states of the Balkan region are having to face are complex and considerable as they involve diverse industries, and a relationship between public and private institutions that is still largely symbolic. Specifically, with regard to the agricultural sector, we are briefly outlining certain specific issues developed during the meeting held in Neum in April 2004, organised by the Forum of the Chambers of Commerce of the Adriatic and the Ionian region, using the analyses and proposals put before the Round Table on Agriculture:
- Lack of support for a unitary agricultural policy at national level;
- Absence or lack of organisation at central institutional level (Ministry of Agriculture) in various countries in the Balkan region;
- Absence or lack of effectiveness of a legal system that encourages controls on hygiene and health checks on imports;
- Defective and incomplete legislation regarding controls on GMOs with serious risks for food safety and consumer protection;
- Lack of political planning instruments and concrete actions to deal with critical environmental situations (drought, flooding, flood retention works, etc.);
- High unemployment in the agricultural sector (up to 40%);
- Environmental degradation due to crop abandonment, especially after the wars;
- Lack of surveillance of areas at risk;
- Fractioning into small parcels of land;
- Low Customs duties on imports, allowing entry of foreign products in strong competition with national production;
- Few possibilities to access credit for agricultural enterprises.
Given the complex structure and multitude of problems listed, this report and the Round Table will focus on some of the issues that appear to be most critical. Developing the agricultural industry in the Balkan region essentially means being able to activate own resources, employ a higher number of unemployed people and reduce dependence on foreign countries in terms of importing food products, in an attempt to resolve a serious commercial deficit problem. One of the thorniest issues is undoubtedly the gradual ageing and professional impoverishment of the workforce in the primary sector. Evidence common to all the age distribution analyses carried out shows a tendency towards a sharp decline in the number of young entrepreneurs in agriculture, both in backward and more advanced areas. This is a worrying sign, as the “flight” of younger people also means the loss of the most dynamic element, better educated to deal with the complex issues faced by the new agricultural enterprise, in view of the scenario presented by the Common Agricultural Policy (CAP) and as a result of the growing tendency towards liberalisation of international markets.
This new enterprise is increasingly showing its need for a shift towards a multifunctional idea of business, where diverse activities and services accompany the traditional ones, such as farm holidays and the sale of organic, high quality products. These functions represent the possibility of added income for farmers which, together with the presence of young, trained people, appears to be essential for the creation of these types of enterprise, more complex and innovative than traditional ones, with the possibility of adopting features of the Italian model of cooperatives. Another critical issue is represented by the fragmentation of land and agricultural properties divided into small parcels of land; this situation causes problems for cultivating products that require a certain number of hectares in order for production to be financially viable. This is added to the presence of small-scale landowners, often unrelated, which makes them very vulnerable on the market, both with regard to the volatility of demand, and with regard to competition with foreign producers. Cooperatives could represent a possible solution to these problems.
Modern competition could, therefore, be dealt with more successfully by achieving collaboration and alliances between the various agricultural cooperatives. The aim of transposing knowledge onto the possibilities of forming associations thus appears to be crucial, focusing heavily on specific professional training for public and private individuals in order apply and understand the various forms of association and the multitude of activities that can be created thanks to such instruments.
Therefore, presenting a successful model for cooperation, such as the Italian model, and in this case the Marche model (as has already been done for the cooperative project of December 2004), that has been holding its own in the marketplace for some time, is not only a good base for training and competitive growth, but is also effective for overcoming the critical points mentioned above, including fragmentation of land ownership. Forming an association makes the individual producer a participant in a more complex reality, making it easier to overcome the problems of achieving returns to scale for the production of specific crops, and guarantees a worthwhile income, thus leaving the farmer less exposed to market competition and variations in the climate.
The need has also been identified to set the proposed model into a local context, in order to positively promote the various experiences and cultures in the local area.
In summary, the following are key elements that represent objectives to be pursued, actions required for economic development of the agricultural industry that is competitive on a world scale:
a) Development of the business culture: via the economic and public operators in the agricultural industry, diffusion of the business values of cooperatives with a modern economic outlook and a view to sustainable development of the land, also by virtue of the direct confrontation between the different organisations that make up the local economic fabric and the experience built up in Italy as a whole and in Marche in particular;
b) Promotion of the local area from an economic and social point of view: enabling agriculture to re-emerge as an industry involved in economic recovery, emphasising the local aspect; the recovery and improvement of this industry actually means developing employment, equal status for agricultural workers compared to other sectors, consolidation of labour across the entire network, adequate pay, the introduction of certain, negotiated flexibility, new methods and tools to reconcile the demand and supply of labour. This means implementing an active employment policy revolving around continuous training, to provide agriculture with the necessary supply of qualified, professionally trained labour.
c) Spreading of awareness of a cooperative business model for development: the area of the Region of Marche is an important example, considering certain similarities highlighted during meetings between operators from Marche and the Balkans in Neum (April 2004; December 2004). This model may contribute to development of the agricultural business system, by transferring the rural development model directed towards a multifunctional approach, where development is combined with environmental protection. Multifunctionality in agriculture does not only involve supplying food products, but also the production of environmental benefits such as conservation of the countryside and the land, that can be implemented through greater interaction with other economic sectors such as industry and tourism etc.
d) Creation of training courses for young entrepreneurs: among the main critical elements in the agricultural industry mentioned above, the presence of young, trained people in the primary sector is a key element to work on in order to stimulate the development of new businesses and to give an impulse to the cooperative sector. One of the main stimuli to competition in the agricultural industry is the training of experts, consultants and professionals in the sector of agroindustrial cooperatives, and public officials with the aim of creating suitable professional skills to form new cooperatives and efficiently manage the existing ones. Specifically, in this way the cooperative model will not only be seen as an element for economic cohesion, but also a chance for social and cultural cohesion (please refer to point B on young people in agriculture);
e) Promotion of environmental sustainability of agricultural production: this concept can be dealt with by looking to the future, with a strong emphasis on development programmes that conceive environmental protection as an opportunity, not a limitation. It is necessary to work from a cultural point of view in order to stimulate the required awareness and to highlight current aspects that impose precise rules for setting up and running environmentally friendly agricultural businesses. However the structure that the European Union has already given to its policies for the industry, tending to favour sustainable, environmentally friendly farming, should be emphasised from the start, especially in view of the Balkan states’ entry into the European Union in the near future. (The new management of aid paid out by the EU provides for environmental awareness as an essential condition for obtaining assistance). The environmental problems of the food industry must be investigated as necessary, in order to highlight how, even in the Balkan region, the most significant problems can be attributed to the disposal of waste water and solid waste.
The approach that the European Union is working on is to transform environmental protection from a legal limitation, with a resulting increase in production costs, into opportunities for product differentiation, with the commercial advantages that may result. From the point of view of sustainability of agricultural production, improving the efficiency of the collateral flow to the primary production process, in other words the service network and external effects, must be favoured.
f) Re-converting and developing the agricultural production system: Measures aimed at converting and developing local agricultural production seem to be important, also by setting up incubators and centres for technological innovation, agricultural research and development.
From the analysis carried out last year and especially via the contact and discussions which have begun in relation to the cooperative project carried out last December, attention should be focused on certain specific themes relating to local products and the relationship between public and private institutions, which still presents problems:
a) Promotion and improvement of quality systems, product certification and traceability: Cooperatives must make themselves available for, and therefore be directed towards, a precise target, in other words to meet the country’s economic demands from a production point of view, with respect for consumers and farmers themselves, without compromising the "environmental asset", everyone’s heritage and a resource for future generations. The Balkan region seems to be rich in typical local products that are not, however, well promoted, for example, wine, honey, lavender or even the marasca cherry, the fruit of specific trees, that produce the famous Maraschino exported from Zara all over the world, promoting the regional identity and contributing to the sale of such products. With specific reference to the marasca cherry (Prunus cerasus var. marasca), a number of studies and research projects are currently underway to improve its economic and commercial potential. The main problems in cultivating the marasca cherry are self-sterility, in other words the fact that certain types of marasca cherry are not able to fertilise themselves, which means that it is necessary to separate species of marasca that can do so. There are now very few new young marasca cherry plantations: the old ones were destroyed during the war, abandoned or uprooted. The marasca cherry is found in small plantations or closed within courtyards and kitchen gardens. Its exceptional quality means that the marasca cherry that grows between Zara and Maraska should be protected geographically (similar to the D.O.P. – Area of Origin Guaranteed). This aspect should be promoted, and during the Round Table session it seems appropriate to draw up a list of local products that could be promoted with ad hoc initiatives.